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Shall I stay or shall I go now? The Facebook conundrum

When news of the Facebook-Cambridge Analytica data scandal broke, the skies above Menlo Park darkened. As the social network releases its Q1 figures, have rumors of its demise been greatly exaggerated?

Over the years, Facebook's quarterly performance updates have been predictable affairs.

Yet the first quarter of 2018 has been a new experience for the social media behemoth, to put it mildly.

The Facebook-Cambridge Analytica data scandal exposed the company to criticism and scrutiny unlike anything it has known before. Its stock price plummeted, its founder and CEO Mark Zuckerberg was forced to explain himself before US Congress in a surreal display that prompted much online mirth, and some advertisers even pulled their products from Facebook.

A platform that at a recent count had close to 2.2 billion users — a staggering 29 percent of the global population — was suddenly facing existential questions about its future. Would concerns over how user data was being used one by one push people away as the siren call of #deletefacebook became more seductive?

In the immediate aftermath of the revelations that sensitive user data from close to 100 million Facebook accounts was provided to a data analytics firm who then used the data to build algorithmic software capable of influencing voter behavior, a few firms took decisive action against Facebook.

Internet company Mozilla, German bank Commerzbank and electronics firm Sonos were among the most well-known companies to stop advertising on the platform.

"We care about protecting your privacy," runs one such pronouncement, visible to users logging on in recent weeks. "We don't sell your data, and we've designed our ad system so that we can show you relevant and useful ads without telling advertisers who you are."

The efforts have worked to some extent. Commerzbank has resumed advertising on the platform. "Since we suspended advertising on the platform, we have been engaged in a fair and constructive discussion with Facebook," Commerzbank's Uwe Hellmann told DW. "We received a specific assurance that measures would be taken to ensure that incidents such as these could not be repeated in the future. In principle, this creates a basis on which we can end our suspension of advertising on Facebook."

Mozilla is one of the few that has not yet returned, however.

"We are still waiting to see what meaningful positive benefit any changes have for Facebook users," Mozilla's chief marketing officer Jascha Kaykas-Wolff told DW.

Jascha Kaykas-Wolff, Mozilla Chief Marketing Officer

"Giving users control of customized ads isn't the same thing as setting defaults that offer meaningful privacy to begin with. Where the rubber meets the road is in changes to policies and practices, of course, and we'll continue watching those developments. We're not ready yet to start advertising on the platform."

You are the product

When the scandal initially broke and Facebook's stock price began to tumble, more than a few business executives asked themselves if they too should consider giving their brands "a pause" on the famous blue platform. Yet the flood of deserters has not yet come.

Plenty have their doubts though. There are a few companies worldwide that spend close to $10 billion a year on advertising, including many millions on Facebook campaigns.

Proctor & Gamble, the massive personal care corporation, is one of the world's largest advertisers, and although it told DW it did not want to comment specifically on Facebook, it did slash its spending on ads on the platform in 2017, mostly over concerns about the effectiveness of online campaigns.

Nestlé, the world's largest food and beverage company and another major global advertiser, also has concerns over Facebook and the manner in which it uses user data, even it has stopped short of halting its advertising.

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Facebook – Anti-Social Media?

Facebook – Anti-Social Media?

"We have engaged in a constructive dialogue with Facebook by asking it to provide us with details on the review process being undertaken and how this will provide more transparency to platform users," a spokesperson told DW.

"We are also carrying out a detailed review of how Nestlé apps, websites and platforms access Facebook data, and how this may need to be modified," they said, adding that Nestlé would assess the impact of Facebook's policy changes over the next two months.

Daniel Kostyra is a Facebook specialist at the digital marketing agency Cocomore in Frankfurt, advising firms such as Nestlé on advertising campaigns on the platform. So far, he has not noticed any major changes in the attitudes of his clients towards Facebook.

"They addressed us and asked our opinion but so far there has not been any change in their spending behavior," he told DW.

Noting that Facebook's value to advertisers is almost exclusively based on its ability to provide data and so-called "targeting" campaigns, he says that deep down, customers know already that "if you are not paying for the product, then you are the product". Or in other words, your data is the product.

Pam Aungst is the President of Pam Ann Marketing, a US-based internet marketing company. She believes it is "highly unlikely" that Facebook will lose any advertising revenue in the short term, and says that the only obvious concern apparent among advertisers since the scandal broke relates to the risk that changes in Facebook's privacy settings may make ads less effective.

Fighting for the internet: Social media, governments and tech companies

Free speech or illegal content?

Whether hate speech, propaganda or activism, governments across the globe have upped efforts to curb content deemed illegal from circulating on social networks. From drawn-out court cases to blanket bans, DW examines how some countries try to stop the circulation of illicit content while others attempt to regulate social media.

Fighting for the internet: Social media, governments and tech companies

Social media law

After a public debate in Germany, a new law on social media came into effect in October. The legislation imposes heavy fines on social media companies, such as Facebook, for failing to take down posts containing hate speech. Facebook and other social media companies have complained about the law, saying that harsh rules might lead to unnecessary censorship.

Fighting for the internet: Social media, governments and tech companies

Right to be forgotten

In 2014, the European Court of Justice ruled that European citizens had the right to request search engines, such Google and Bing, remove "inaccurate, inadequate, irrelevant or excessive" search results linked to their name. Although Google has complied with the ruling, it has done so reluctantly, warning that it could make the internet as "free as the world's least free place."

Fighting for the internet: Social media, governments and tech companies

Blanket ban

In May 2017, Ukraine imposed sanctions on Russian social media platforms and web services. The blanket ban affected millions of Ukrainian citizens, many of whom were anxious about their data. The move prompted young Ukrainians to protest on the streets, calling for the government to reinstate access to platforms that included VKontakte (VK), Russia's largest social network.

Fighting for the internet: Social media, governments and tech companies

Safe Harbor

In 2015, the European Court of Justice ruled that Safe Harbor, a 15-year-old pact between the US and EU that allowed the transfer of personal data without prior approval, was effectively invalid. Austrian law student Max Schrems launched the legal proceedings against Facebook in response to revelations made by former US National Security Agency (NSA) contractor, Edward Snowden.

Fighting for the internet: Social media, governments and tech companies

Regulation

In China, the use of social media is highly regulated by the government. Beijing has effectively blocked access to thousands of websites and platforms, including Facebook, Twitter, Instagram and Pinterest. Instead, China offers its citizens access to local social media platforms, such as Weibo and WeChat, which boast hundreds of millions of monthly users.

Fighting for the internet: Social media, governments and tech companies

Twitter bans Russia-linked accounts

Many politicians and media outlets blame Russia's influence for Donald Trump's election victory in 2016. Moscow reportedly used Facebook, Twitter, Google, and Instagram to shape public opinion on key issues. In October 2017, Twitter suspended over 2,750 accounts due to alleged Russian propaganda. The platform also banned ads from RT (formerly Russia Today) and the Sputnik news agency.

Fighting for the internet: Social media, governments and tech companies

Facebook announces propaganda-linked tool

With social media under pressure for allowing alleged Russian meddling, Facebook announced a new project to combat such efforts in November 2017. The upcoming page will give users a chance to check if they "liked" or followed an alleged propaganda account on Facebook or Instagram. Meanwhile, Facebook has come under fire for not protecting user data in the wake of the Cambridge Analytica scandal.

Author: Lewis Sanders IV (dj)

"Advertisers are fearful of losing ad targeting options," she told DW. "Again, users are the ones that are mad at Facebook, not the advertisers. Ad agencies such as ourselves are concerned that as Facebook increases privacy measures, our ad targeting options will become more limited. This has already started to occur and may continue."

Can't live, with or without you

That would all suggest advertisers will only leave in significant numbers once ordinary users leave, taking their data with them and making Facebook less useful for advertising as a result.

The Q1 figures will provide further clarity, but it is already apparent that plenty of users have left Facebook in 2018. One such user, Tony, a 27-year-old working for a non-profit organization in Berlin, says he deactivated his Facebook account two weeks before the scandal broke, "before it was cool."

Although his reasons were related more to the manner of his own usage habits rather than to any concerns he held over privacy, he has noticed a change recently among many of his friends over how they use the platform. "They now all see the malice behind how their data can be used," he said.

Nadja, an account manager working in Berlin, has used Facebook for more than a decade as a way of staying in touch with friends and family who don't live close to her.

She still enjoys using Facebook, even if she has been a bit disturbed by an increase in advertisements in recent years. Although not happy with the recent data breach scandal, she hasn't seriously considered stepping away from the platform.

"If I go, people that I want to stay in touch with might still be there and I might not be in touch with them anymore," she said. "Everyone would need to leave and join something else. That is one thing that has been keeping me away from that."

That's precisely the kind of sentiment Facebook hopes will help it through the current storm, even if it does look destined to lose a few devotees along the way.